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Data URIs are nothing more than text in the form of Base64-encoded binary data within your HTML and CSS files. So yes, they will be downloaded as part of your HTML and CSS files every time they're requested, unless those files are themselves cached.

thanks, I totally get it now, the wikipedia remark made it sound like I wouldn't be able to do that. Cheers
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marflarJan 25 '11 at 9:40

It means: data is always cached together with the containing document. If you make changes to either the data URI or the HTML/CSS which contains it, all of them have to be reloaded (since they reside in the same document)
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syockitFeb 27 '11 at 0:10

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@sysockit is right. @stephenmurdoch, Please consider my Avoid Data URIs article before going all base64 on your assets :-) In essence, when you separate your encoded images by context to dedicated css files with MHTML fallback for IE you end up with bloated, hardly maintainable sprites.
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RonnyMay 8 '11 at 22:17